This week, Richard Spector, Managing Partner at city law firm ELS Legal, looks at news that the UK and EU Governments are planning a crackdown on the hugely popular cryptocurrency Bitcoin, amid reports that it is being used for fraud and tax evasion.
The House of Commons Treasury select committee suggested on Monday that a review of cryptocurrencies was in order.
At the start of the year, few would have predicted Bitcoin’s rapid rise to glory, while those that did are now substantially better off.
The virtual currency recently passed the $10,000 mark, 10 times that of what it started at at the beginning of 2017.
But amid crazed investor interest, the value of Bitcoin dropped sharply following the announcement that the Government will wage war on digital currencies suspected of being used for criminal purposes.
The Treasury said it would work on bringing Bitcoin in line with anti-money laundering and counter-terrorism financial legislation.
Under such rules, traders will no longer be able to hide behind Bitcoin “wallets”, identified only as numbers in a massively shared database.
It comes as concerns grow that Bitcoin and similar currencies are being used to commit fraud and other criminal activity.
Labour MP John Mann, members of the Treasury select committee, said: “These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get left behind – that’s particularly important in terms of money laundering, terrorism or pure theft.
“It would be timely to have a proper look at what this means. It may be that we want to speed up our use of these kinds of thing in this country, but that makes it all the more important that we don’t have a regulatory lag.”
Stephen Barclay, the economic secretary to the Treasury, added: “The UK government is currently negotiating amendments to the anti-money laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas.
“The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017 or early 2018.”
About Richard Spector: Managing Partner Richard specialises in property transactions and commercial litigation. Richard has acted in a number of high-profile cases and was heavily involved in the litigation that arose from the collapse of Lehman Brothers. Richard has been involved in a number of cross-border litigation cases and recently acted successfully for the Claimants in Harlequin Property (SVG) Ltd & Anr v Wilkins Kennedy, listed in the Lawyer’s top 20 cases of 2016.
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